An Infringement of a Registered Trademark

Facts of the Case

AIn July 1995, the US Philip Morris Product U.S.A. entrusted a Chinese agent to file a complaint with the Chongqing Administration for Industry and Commerce (CAIC) against the Yilaoyangwu Deluxe Tissues Mill (Mill) of Dazu County, Chongqing City for infringing its exclusive right to use its registered trademark, "Marlboro", requesting CAIC to investigate and handle the matter. CAIC accepted and put the case on file for adjudication. Its investigation revealed that the plastic packages bearing "Marlboro" which Mill used for its products were printed by the Plastic Colour Printing Factory (PCPF) of Dazu County, Chongqing City.

It is found out that, in April 1994, Mill reached an oral contract with PCPF for printing the said plastic packages of "Marlboro" for the tissue products. The latter printed all together 171,000 pieces of the packages and the former paid RMB 2,394 yuan therefor. Mill used 11,000 pieces of them to package its tissue products, with 9,380 packs of them sold out for a total sum of RMB 3,189.2 yuan. The unsold 1,620 packs of the tissue products and the remaining 160,000 plastic packages bearing the mark "Marlboro" were sealed up by CAIC.

CAIC holds that "Marlboro" is a well-known trademark the Philip Morris U.S.A. has registered and used for cigarettes, and it should be adequately protected according to the related provisions of the Paris Convention for the Protection of Industrial Property. Mill's use of the word or representation identical with or similar to the "Marlboro" trademark as a packaging decoration on its product is a trademark infringing act that "impairs the rights of other's exclusive right to use its registered trademark" provided in Article 38(4) of the Trademark Law. In accordance with Rule 43 of the Implementing Regulations of the Trademark Law, CAIC made, on 24 July 1995, the ruling with regard to Mill that:

1. It immediately desist from selling the tissue products bearing the "Marlboro" mark;
2. The plastic packages bearing "Marlboro" used for the sealed up 1,620 packs of the tissue products be destroyed;
3. The 160,000 pieces of plastic packages bearing "Marlboro" mark sealed up be destroyed; and
4. A fine of RMB2,700 yuan be imposed and turned over to the National Treasury.

PCPF's printing the word and representation of "Marlboro" on the plastic packages without authorization from the trademark registrant is a trademark infringing act of "counterfeiting, or making, without authorization, representations of a registered trademark of another person or selling such representations of a registered trademark as were counterfeited, or made without authorization" as defined in Article 38(3) of the Trademark Law. And according to Rule 43 of the Implementing Regulations, CAIC decides to

1. Confiscate and seal up the used printing moulds and plates; and
2. Impose a fine of RMB 1,400 yuan to be turned over to the National Treasury.

Analysis
This is a typical case involving the use of another person's well-known trademark for goods in different class and making without authorization the representation of a well-known trademark. A well-known trademark is one that enjoys relatively high reputation in the market and publicly known through long time of use. The scope of protection of ordinary registered trademark is to prohibit others from using a trademark identical with or similar to the registered trademark for identical or similar goods to prevent consumers from mistaking the origin thereof. As for the protection of a well-known trademark, since it is highly well known and enjoys considerable market reputation, another person's use thereof for goods of different class may still cause consumers to mistake the origin of goods or make them wrongly think that the goods is related to a certain degree with the owner of the well-known trademark, thus impairing its rights and interests. As this indicates, the scope of protection of well-known trademarks is broader than that of ordinary trademarks. Well-known trademarks have originated from the Paris Convention for the Protection of Industrial Property as revised early this century. To Article 6bis thereof is added the provision on the protection of well-known trademarks, but the scope of protection is confined to the registration and use of trademark identical with or similar to another person's well-known trademark for identical or similar goods. According to Article 16 of the TRIPS Agreement, the protection of well-known trademarks has been broadened to cover the registration of a trademark for goods or services of different class from those for which an identical or similar trademark is used for. China is a member state of the Paris Convention for the Protection of Industrial Property and a signatory of the TRIPS Agreement though it has not jointed WTO. It has been actively seeking its membership thereof. Meanwhile, as a member of APECO, China is required to have protected well-known goods up to the standards as imposed by the TRIPS Agreement by 2000. In addition, the present economic developments in China also call for a broader scope of protection of well-known trademarks. To this end, the Interim Provisions for Authentication and Administration of Well-Known Trademarks issued for implementation by the State Administration for Industry and Commerce (SAIC) in August 1996 is in keeping with the TRIPS Agreement.

The "Marlboro" trademark involved in this case is one registered and used by the Philip Morris Products U.S.A. for cigarettes. Extensive advertisement and long time of use by the trademark owner has brought high reputation to this cigarette trademark and made it well known to consumers in China. Moreover, SAIC has determined that it is a well-known trademark in the Administrative Response to the Issue of Protection of the Well-known "Marlboro" Trademark issued to the Administration for Industry and Commerce of Zhejiang Province. This case took place in July 1995, when SAIC had not yet promulgated its Interim Provisions on Authentication and Administration of Well-known Trademarks, and there had not been any specific provisions relating to the broadened protection of well-known trademarks in China. Thus, the case was adjudicated mainly according to the basic principle set forth in the Paris Convention and the appropriate judicial and administrative principles. Mill's use of the trademark of "Marlboro" and its representation as the trademark and package decoration for its tissue products and the basically similar appearance, shape, size, thickness and decoration of the package of the tissue products to those of "Marlboro" cigarettes indicate the relatedness of the tissue with the owner of "Marlboro" trademark, make it extremely easy for consumers to mistake that they are produced by the owner of "Marlboro" trademark or that they are related thereto, thus impairing the rights and interests thereof. It complies with the law and regulations for CAIC to accept and put on file for adjudication of the complaint and handle the unlawful act of PCPF to print the signs of other's registered trademark without authorization.